US administration ties schools' federal loan access to earning power of grads

The U.S. Education Department said on Monday it was finalizing new federal student loan rules that would tie schools' federal loan access to the earning power of graduates, marking the Trump administration's latest pressure on colleges and universities.



"Under the new Student Tuition and Transparency System (STATS) and Earnings Accountability rule, undergraduate programs will be required to demonstrate that their graduates earn more than the typical high school diploma holder, and graduate programs will be required to demonstrate that their graduates earn more than the typical bachelor's degree holder," the Education Department said in a statement.



"If a program fails to show at least this modest financial return on investment for its graduates in two out of three consecutive award years, it will lose eligibility to participate in the federal Direct Loan program," it said.



The final rule will be published on July 1, the Education Department said, adding that 2027 will be the first year that schools will be held responsible for meeting the earnings thresholds.